Bugs remain in administrative procedures surrounding Land Information New Zealand’s (LINZ) Landonline system, and the registrar general of lands has ordered an audit of document handling processes surrounding the system.
This follows an incident where faxed copies of documents, rather than the originals, were filed by the wrong party in a conveyancing transaction and went onto Landonline’s electronic record without being picked up.
The vendor’s lawyer in the transaction notified the Auckland District Law Society in a letter headed in the Society’s newsletter, “Scary experience with Land-on-line [sic] registration”.
Whether the fault should be attributed to Landonline is a matter of interpretation, says acting registrar general Warren Moyes. But in the pre-Landonline days, he says, the LINZ staffer who did the registration would have worked from an original document. In the Landonline era, either solicitors input data directly online, or, as in this case, the documents are scanned at LINZ and registration staff work with the electronic images, which makes irregular faxes and photocopies harder to detect at that stage.
Ironically, if the document had been filed electronically, Landonline’s digital signature system would have detected that the wrong party was filing it.
The complainant worked for Auckland law firm Haigh Lyon, which acted for the vendor in the transaction. “Our client left in $20,000 for the benefit of the purchasers with an unregistered second mortgage,” says Haigh Lyon’s Sarah McBeath. The firm retained the settlement documents until an undertaking had been received from its client that they would not increase the amount of their first mortgage.
Despite this, the sale was registered and signed by the purchaser’s solicitor, on the strength of the faxes sent to them by Haigh Lyon, an irregular procedure which Moyes describes as “certainly a concern”.
“It’s one of the things the staff who scan documents should be looking out for,” he says “to ensure they have an original document.”
In this case, he says, the fact that the documents were faxes had been obscured by removal of the fax headings. “They had not just been struck out, but completely removed.”
The audit is intended to ensure staff scanning documents and handling electronic copies know the correct procedures and will pick up future irregularities, says Moyes. It will be carried out at LINZ’s five district offices.